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Since the arrival of President Barack Obama's new administration in Washington, DC, lawmakers, physicians, patients, and key stakeholders from every sector of the healthcare industry have been discussing healthcare system reform with a renewed sense of urgency. Among the books that offer an in-depth look at the current state of healthcare is Rx for Health Care Reform by Ken Terry, MA.

From his vantage point as a senior editor at Medical Economics magazine (a post he has since vacated), Mr Terry offers readers a critical analysis of the healthcare delivery system in the United States.

Rx is divided into four parts, starting with Part I, which looks at how the system has evolved to its current state. In Part II, Mr Terry explores current trends in the healthcare delivery system and identifies the benefits and limitations of each proposed model on their ability to contain healthcare spending. Part III focuses on factors that are contributing to the high cost of healthcare, including new imaging technologies and prescription drug prices. Mr Terry ends the book with Part IV, which outlines a unique proposal for healthcare reform.

One of the current trends in healthcare Mr Terry examines is pay-for-performance initiatives. In chapter 4, he explains how proponents of this practice believe paying physicians more for doing well on certain measures and procedures can encourage them to provide quality healthcare, thus helping patients stay healthy and reducing overall healthcare costs. But this practice has unintended consequences according to Mr Terry. He asserts that physicians who participate in a pay-for-performance program are actually being rewarded for providing more services, thus driving up spending on healthcare.

In chapter 6, Mr Terry discusses consumer-directed care, another practice touted as a cost-containment strategy. Proponents believe having consumers save and spend their own money—through programs such as health savings accounts—will encourage them to lead healthier lifestyles and use fewer medical services, thus reducing overall healthcare costs. However, Mr Terry points out that it also assumes that these consumers are able to make good choices about their medical care. Some argue this model asks too much from patients, who aren't necessarily familiar with complex medical issues and may not be in a position to make decisions when they need care.

After examining the deficiencies of current trends in healthcare reform, Mr Terry argues that there is no way to save the system short of a complete overhaul. In Part IV of the book, he fulfills the promise of the book's title and proposes a prescription for healthcare reform. His plan consists of two unique elements. The first would require physicians to form practice groups that assume the financial risk of providing care to patients. Competition among these groups, rather than among insurance companies, would create a healthcare “market.” The physician groups would develop their own budgets and would be paid a set amount to operate, as opposed to the standard fee-for-service arrangement. To stay within budget, the groups would need to strive for efficiency in all aspects of practice. Because, under this system, sick patients would hurt practices' bottom lines, physicians would have greater incentive to keep patients healthy.

The second element of Mr Terry's proposal involves allowing only one health insurer to operate in each city or region. Each insurer would operate like a state-regulated utility and would not have the power to negotiate prices with physicians. The insurers' only role in managing care would be to measure the performance of physicians, hospitals, and other healthcare providers. These “utility insurers” would be funded by individuals and employers via a payroll tax, which would be distributed by the federal government. The insurers would use that money to prepay physician groups for primary care services and to pay claims to specialists, laboratories, and treatment provided by other healthcare providers. Patients would have the option to select a physician group for their healthcare needs based on cost and quality.

Mr Terry points out that larger group practices have the resources and flexibility to make major organizational changes that usually cost more in the short term but can lead to long-term financial gains, like adopting electronic health records, expanding office hours, and implementing virtual office visits. For this reason, he predicts that physician groups under his “Rx“would number between 10 and 100 physicians.

Mr Terry's plan combines elements from healthcare delivery models that have effectively contained spending in the past. One such program in Minnesota, called Patient Choice, allows US employers to contract directly with healthcare providers. This and other models mirrored in Mr Terry's plan have addressed problems identified in the highly publicized 2001 Institute of Medicine report Crossing the Quality Chasm: A New Health System for the 21st Century, which identifies poorly designed care as the result of a fragmented delivery system characterized by unnecessary duplication of services, long waits, and delays.

Mr Terry's proposal resonates with another initiative that addresses problems identified in the Institute of Medicine's report—the patient-centered medical home concept, which is being piloted by insurers such as Medicare. The American Osteopathic Association is a leading supporter of the patient-centered medical home model for care, being one of the founders of the Joint Principles of the Patient Centered Medical Home, which were released in 2007 in conjunction with the American Academy of Family Physicians, the American Academy of Pediatrics, and the American College of Physicians. According to the Joint Principles (available at http://www.pcpcc.net/content/joint-principles-patient-centered-medical-home), “The patient centered medical home (PCMH) is an approach to providing comprehensive primary care for children, youth and adults. The PCHM is a health care setting that facilitates partnerships between individual patients and their personal physicians, and when appropriate, the patient's family.” Like Mr Terry's proposal, these joint principals emphasize the need for an ongoing relationship between patients and primary care physicians.

In a time when healthcare reform is at the forefront of everyone's mind, Mr Terry offers a unique proposal that draws upon elements of other healthcare delivery models that have successfully overcome barriers to accessibility, efficiency, and quality that persist in our current system. Individuals who play a role in reforming our nation's health care system—especially physicians practicing in both primary care and specialty settings, lawmakers, and leaders at our nation's think tanks and academic institutions—will want to pick up Rx for Health Care Reform and consider Mr Terry's proposal.

The book reviews that follow are the first in a series written by members of the American Osteopathic Association's Health System Reform Task Force. The series aims to educate members of the osteopathic medical profession on current healthcare reform efforts as well as motivate them to learn more about the need for comprehensive healthcare reform and the role they can play in achieving it. Members of the AOA may learn more about health system reform by logging into the members-only section of DO-Online and selecting “Health System Reform” under the “Advocacy” tab. For more information on the AOA's Health System Reform Task Force, please contact Susan Friedman at sfriedman@osteopathic.org or 1-800-621-1773, extension 8643.